Betashares broadens $2.5bn credit ETF as hybrids era wanes

Binaya Dahal

Journalist

13 April 2026

Fund manager Betashares has broadened the investment mandate of its flagship income strategy and renamed its hybrid-focused exchange traded fund, as it seeks to reposition the product for a changing Australian credit market.

It has rebranded the Hybrid Active ETF (ASX: HBRD), launched in 2017 and now managing more than $2.5bn in assets, as Betashares Australian Credit Income Active ETF. HBRD, since its inception, has provided actively managed exposure across the capital structure of Australian financial credit.

The fund managed by Coolabah Capital Investments will retain its active, floating-rate and interest-rate-hedged approach but will have its investment universe expanded beyond bank hybrids into a broader range of credit instruments.

The overhaul comes as the Australian Prudential Regulation Authority (APRA) phases out Additional Tier 1 (AT1) bank hybrid securities following its December 2024 decision, a move expected to gradually reduce issuance in a market that has long underpinned retail income strategies.

Under the new mandate, the strategy can invest in senior and subordinated debt, corporate hybrids, and investment-grade securitised credit, including asset-backed and residential mortgage-backed securities. It can also hold cash and use a wider range of credit hedging instruments to manage risk.

Betashares’ chief executive Alex Vynokur said the enhancements aim to future-proof the strategy as the Australian credit market evolves.

“HBRD has played a meaningful role in providing investors and their financial advisers with access to high-quality Australian credit income opportunities through a convenient ETF structure,” he said.

“These enhancements help ensure the fund can continue delivering consistent, attractive income and return outcomes as the credit market evolves.”

Furthermore, the firm has removed the performance fee and adopted a new investment objective targeting returns of at least 2% above the Reserve Bank of Australia cash rate over rolling three-year periods, after fees and expenses.

Betashares said the core investor experience remains largely unchanged despite the expanded mandate, with continued emphasis on high-quality Australian credit and active management designed to deliver regular income across changing interest rate environments.

“What is changing is the opportunity set is broadening, as is the range of hedging instruments, enhancing the available income opportunities, while managing credit risk,” Vynokur said.